DatChat Inc

Previous wording

In January 2024, we announced plans to spin-off the Habytat platform business into a new standalone public company pursuant to a distribution of the Dragon shares as further discussed below. As of the date of this Quarterly Report, we currently own approximately 70.0% of Dragon, the entity that owns and operates the Habytat platform business. This marked a significant step forward in our corporate strategy to reposition the Company as a pureplay social media ecosystem centered around our Myseum assets.

Current wording

In January 2024, we announced plans to spin-off the Habytat platform business into a new standalone public company pursuant to a distribution of the Dragon shares as further discussed below. As of the date of this Quarterly Report, we currently own approximately 45.5% of Dragon, the entity that owns and operates the Habytat platform business. This marked a significant step forward in our corporate strategy to reposition the Company as a pureplay social media ecosystem centered around our Myseum assets.

Previous wording

On January 16, 2024, we entered into an underwriting agreement with EF Hutton LLC, as the representative of the underwriters named therein, relating to an underwritten public offering of 382,972 shares of our common stock and pre-funded warrants to purchase up 590,000 shares of our common stock for net proceeds of approximately $1.4 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, which closed on January 16, 2024.** **

Current wording

On January 16, 2024, we entered into an underwriting agreement with EF Hutton LLC, as the representative of the underwriters named therein, relating to an underwritten public offering of 382,972 shares of our common stock and pre-funded warrants to purchase up 590,000 shares of our common stock for net proceeds of approximately $1.4 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, which closed on January 16, 2024.** As of the date of this report, this agreement has been terminated.**

Previous wording

Costs incurred to develop internal-use software including Metaverse software development, are expensed as incurred during the preliminary project stage. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. Software development costs incurred during the six months ended June 30, 2024 and 2023 were expensed since the Metaverse software development project is in the preliminary project stage. Such costs are included in research and development costs on the accompanying consolidated statement of operations.

Current wording

Costs incurred to develop internal-use software including Metaverse software development, are expensed as incurred during the preliminary project stage. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. Software development costs incurred during the nine months ended September 30, 2024 and 2023 were expensed since the Metaverse software development project is in the preliminary project stage. Such costs are included in research and development costs on the accompanying consolidated statement of operations.

Previous wording

On March 31, 2024, based on the Company’s analysis, the Company deconsolidated Metabizz, LLC and Metabizz SAS. During the three months ended March 31, 2024, the Company ceased doing business with Metabizz, LLC and Metabizz SAS and will pay technology professionals directly. In connection with the deconsolidation of Metabizz, LLC and Metabizz SAS, during the six months ended June 30, 2024, the Company recorded a gain on deconsolidation of $107.

Current wording

On March 31, 2024, based on the Company’s analysis, the Company deconsolidated Metabizz, LLC and Metabizz SAS. During the three months ended March 31, 2024, the Company ceased doing business with Metabizz, LLC and Metabizz SAS and will pay technology professionals directly. In connection with the deconsolidation of Metabizz, LLC and Metabizz SAS, during the nine months ended September 30, 2024, the Company recorded a gain on deconsolidation of $107.

Previous wording

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee, non-employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee, non-employee, and director services received in exchange for an award based on the grant-date fair value of the award.

Current wording

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee, non-employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee, non-employee, and director services received in exchange for an award based on the grant-date fair value of the award. The fair value of each option granted is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, net of actual forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of our common stock, expected life of stock options, the expected volatility, and the expected risk-free interest rate, among others. These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside of our control. As a result, if other assumptions had been used, stock-based compensation expense, as determined in accordance with authoritative guidance, could have been materially impacted. Furthermore, if we use different assumptions on future grants, stock-based compensation expense could be materially affected in future periods.

Previous wording

During the three months ended June 30, 2024 and 2023, we generated minimal revenues of $151 and $172, respectively. During the six months ended June 30, 2024 and 2023, we generated minimal revenues of $282 and $326, respectively.

Current wording

During the three months ended September 30, 2024 and 2023, we generated minimal revenues of $62 and $175, respectively. During the nine months ended September 30, 2024 and 2023, we generated minimal revenues of $344 and $501, respectively.

Previous wording

For the three months ended June 30, 2024, operating expenses amounted to $1,267,254 as compared to $2,326,931 for the three months ended June 30, 2023, a decrease of $1,059,677, or 45.5%. For the six months ended June 30, 2024, operating expenses amounted to $2,930,804 as compared to $4,749,602 for the six months ended June 30 2023, a decrease of $1,818,798, or 38.3%. For the three and six months ended June 30, 2024 and 2023, operating expenses consisted of the following:

Current wording

For the three months ended September 30, 2024, operating expenses amounted to $1,238,246 as compared to $2,542,326 for the three months ended September 30, 2023, a decrease of $1,304,080, or 51.3%. For the nine months ended September 30, 2024, operating expenses amounted to $4,169,050 as compared to $7,291,928 for the nine months ended September 30 2023, a decrease of $3,122,721, or 42.8%. For the three and nine months ended September 30, 2024 and 2023, operating expenses consisted of the following:

Previous wording

During the three months ended June 30, 2024 and 2023, compensation and related expenses amounted to $522,596 and $1,380,038, respectively, a decrease of $857,442, or 62.1%. The decrease was attributable to a decrease in stock-based compensation of $746,806 and an overall decrease in compensation and other related expenses of $110,636.

Current wording

During the three months ended September 30, 2024 and 2023, compensation and related expenses amounted to $461,422 and $1,247,302, respectively, a decrease of $785,880, or 63.0%. The decrease was attributable to a decrease in stock-based compensation of $620,976 and an overall decrease in compensation and other related expenses of $164,904.

Previous wording

During the six months ended June 30, 2024 and 2023, compensation and related expenses amounted to $1,420,260 and $2,929,730, respectively, a decrease of $1,509,470, or 51.5%. The decrease was attributable to a decrease in stock-based compensation of $1,345,389 and an overall decrease in compensation and other related expenses of $164,081.

Current wording

During the nine months ended September 30, 2024 and 2023, compensation and related expenses amounted to $1,881,682 and $4,177,032, respectively, a decrease of $2,295,350, or 54.9%. The decrease was attributable to a decrease in stock-based compensation of $1,966,364 and an overall decrease in compensation and other related expenses of $328,986.

Previous wording

During the three months ended June 30, 2024 and 2023, marketing and advertising expenses amounted to $32,883 and $46,599, respectively, a decrease of $13,716, or 29.4%. During the six months ended June 30, 2024 and 2023, marketing and advertising expenses amounted to $67,600 and $160,402, respectively, a decrease of $92,808, or 57.9%. The decrease was primarily due to an overall decrease in promotions, branding and digital marketing strategies and social media ads.

Current wording

During the three months ended September 30, 2024 and 2023, marketing and advertising expenses amounted to $34,134 and $219,008, respectively, a decrease of $184,874, or 84.4%. During the nine months ended September 30, 2024 and 2023, marketing and advertising expenses amounted to $101,734 and $379,410, respectively, a decrease of $277,676, or 73.2%. The decrease was primarily due to an overall decrease in promotions, branding and digital marketing strategies and social media ads.

Previous wording

During the six months ended June 30, 2024 and 2023, we reported professional and consulting expenses of $503,899 and $577,077, respectively, a decrease of $73,178, or 12.7%. The decrease was primarily attributable to a decrease in investor relations of $44,646, a decrease in legal fees of $28,835, a decrease in stock-based consulting fees of $12,283, and a decrease other professional fees of $2,476, offset by an increase in other consulting fees of $9,954, and an increase in accounting fees of $5,108.

Current wording

During the three months ended September 30, 2024 and 2023, we reported professional and consulting expenses of $222,220 and $483,319, respectively, a decrease of $261,099, or 54.0%. The decrease was primarily attributable to a decrease in investor relations of $218,664 and a decrease in stock-based consulting fees of $65,184, offset by an increase in legal fees of $31,710.

Previous wording

During the three months ended June 30, 2024 and 2023, we reported professional and consulting expenses of $250,274 and $321,157, respectively, a decrease of $70,883, or 22.1%. The decrease was primarily attributable to a decrease in legal fees of $38,753, a decrease in investor relations of $34,840, a decrease in stock-based consulting fees of $28,727, and a decrease other professional fees of $2,511, offset by an increase in other consulting fees of $27,742, and an increase in accounting fees of $6,207.

Current wording

During the nine months ended September 30, 2024 and 2023, we reported professional and consulting expenses of $726,119 and $1,060,396, respectively, a decrease of $334,277, or 31.5%. The decrease was primarily attributable to a decrease in investor relations of $263,310, a decrease in stock-based consulting fees of $77,467, and a decrease in other professional fees of $20,978, offset by an increase in accounting fees of $27,478.

Previous wording

During the three months ended June 30, 2024 and 2023, we incurred $226,058 and $337,458 in research and development expenses, a decrease of $111,400, or 33.0%. During the six months ended June 30, 2024 and 2023, we incurred $459,976 and $620,231 in research and development expenses, a decrease of $160,255, or 25.8%. Research and development costs were incurred in connection with our Metaverse software development project, including the development of Habytat which is in the preliminary stage.

Current wording

During the three months ended September 30, 2024 and 2023, we incurred $363,472 and $380,017 in research and development expenses, a decrease of $16,545, or 4.4%. During the nine months ended September 30, 2024 and 2023, we incurred $823,448 and $1,000,248 in research and development expenses, a decrease of $176,800, or 17.7%. Research and development costs were incurred in connection with our Metaverse software development project, including the development of Habytat which is in the preliminary stage.

Previous wording

During the three months ended June 30, 2024 and 2023, general and administrative expenses amounted to $235,443 and $241,679, a decrease of $6,236, or 2.6%. The decrease was primarily attributable to a decrease in travel expenses of $11,108, a decrease of public company fees of $5,796, and a decrease in other general and administrative expenses of $3,557, offset by an increase in internet and computer expenses of $14,225.

Current wording

During the three months ended September 30, 2024 and 2023, general and administrative expenses amounted to $156,998 and $212,680, a decrease of $55,682, or 26.2%. The decrease was primarily attributable to a decrease in travel expenses of $40,212 and a decrease in other general and administrative expenses of $15,470.

Previous wording

During the three months ended June 30, 2024 and 2023, operating expenses included an impairment charge related to the write down of digital assets of $0. During the six months ended June 30, 2024 and 2023, operating expenses included an impairment charge related to the write down of digital assets of $0 and $23,381, respectively.

Current wording

During the three months ended September 30, 2024 and 2023, operating expenses did not include an impairment charge related to the write down of digital assets. During the nine months ended September 30, 2024 and 2023, operating expenses included an impairment charge related to the write down of digital assets of $0 and $23,381, respectively.

Previous wording

During the three months ended June 30, 2024, loss from operation amounted to $1,267,103 as compared to $2,326,759 during the three months ended June 30, 2023, a decrease of $1,059,656, or 45.5%. During the six months ended June 30, 2024, loss from operation amounted to $2,930,522 as compared to $4,749,276 during the six months ended June 30, 2023, a decrease of $1,818,754, or 38.3%.

Current wording

During the three months ended September 30, 2024, loss from operation amounted to $1,238,246 as compared to $2,542,151 during the three months ended September 30, 2023, a decrease of $1.303,967, or 51.3%. During the nine months ended September 30, 2024, loss from operation amounted to $4,168,706 as compared to $7,291,427 during the nine months ended September 30, 2023, a decrease of $3,122,721, or 42.8%.

Previous wording

Other income (expenses) primarily consisted of interest income, gain on initial consolidation of variable interest entities, gain on deconsolidation of variable interest entities, foreign currency exchange loss, and realized gains or losses on short-term investments. During the three months ended June 30, 2024 and 2023, we reported other income, net of $62,995 and $39,529, respectively. During the six months ended June 30, 2024 and 2023, we reported other income, net of $164,607 and $62,832, respectively.

Current wording

Other income (expenses) primarily consisted of interest income, gain on initial consolidation of variable interest entities, gain on deconsolidation of variable interest entities, foreign currency exchange loss, and realized gains or losses on short-term investments. During the three months ended September 30, 2024 and 2023, we reported other income, net of $54,726 and $177,571, respectively. During the nine months ended September 30, 2024 and 2023, we reported other income, net of $219,333 and $240,403, respectively.

Previous wording

During the three months ended June 30, 2024, other income, net solely consisted of interest income of $62,995. During the three months ended June 30, 2023, other income, net primarily consisted of interest income of $39,595 and a foreign currency exchange loss of $66.

Current wording

During the three months ended September 30, 2024, other income, net solely consisted of interest income of $54,726. During the three months ended September 30, 2023, other income, net primarily consisted of interest income of $177,607 and a foreign currency exchange loss of $36.

Previous wording

During the six months ended June 30, 2024, other income, net primarily consisted of interest income of $177,465, a gain on deconsolidation of variable interest entities of $107, and a foreign currency exchange loss of $12,965. During the six months ended June 30, 2023, other income, net primarily consisted of interest income of $67,833, a gain on initial consolidation of variable interest entities of $42,737, a foreign currency exchange loss of $66, and a realized loss on short-term investments of $47,672.

Current wording

During the nine months ended September 30, 2024, other income, net primarily consisted of interest income of $232,191, a gain on deconsolidation of variable interest entities of $107, and a foreign currency exchange loss of $12,965. During the nine months ended September 30, 2023, other income, net primarily consisted of interest income of $245,440, a gain on initial consolidation of variable interest entities of $42,737, a foreign currency exchange loss of $102, and a realized loss on short-term investments of $47,672.

Previous wording

Due to the foregoing reasons, during the three months ended June 30, 2024 and 2023, our net loss was $1,204,108, or $(0.33) per common share (basic and diluted) and $2,287,230, or ($1.10) per common share (basic and diluted), respectively, a decrease of $1,083,122, or 47.4%. During the six months ended June 30, 2024 and 2023, our net loss was $2,765,915, or $(0.73) per common share (basic and diluted) and $4,686,444, or ($2.27) per common share (basic and diluted), respectively, a decrease of $1,920,529, or 41.0%.

Current wording

Due to the foregoing reasons, during the three months ended September 30, 2024 and 2023, our net loss was $1,183,458 and $2,364,580, respectively, a decrease of $1,181,122, or 50.0%. During the nine months ended September 30, 2024 and 2023, our net loss was $3,949,373 and $7,051,024, a decrease of $3,101,651, or 44.0%. During the three months ended September 30, 2024 and 2023, after adjusting net loss for net (income) of subsidiary attributable to noncontrolling interest of $(88,343) and $0, respectively, net loss attributable to common shareholders of was $1,271,801, or $(0.42) per common share (basic and diluted) and $2,364,580, or ($1.13) per common share (basic and diluted), respectively, a decrease of $1,092,779, or 46.2%. During the nine months ended September 30, 2024 and 2023, after adjusting net loss for net loss of subsidiary attributable to noncontrolling interest of $566,513 and $0, respectively, our net loss attributable to common shareholders was $3,392,860, or $(1.15) per common share (basic and diluted) and $7,051,024, or ($3.40) per common share (basic and diluted), respectively, a decrease of $3,658,164, or 51.9%.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $587,518 and short-term investments of $4,661,494. Short-term investments include U.S. Treasury zero coupon bills that are all highly rated and have initial maturities between four and twelve months.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $632,497 and short-term investments of $3,919,697. Short-term investments include U.S. Treasury zero coupon bills that are all highly rated and have initial maturities between four and twelve months.

Previous wording

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited consolidated financial statements, we had a net loss of $2,765,915 for the six months ended June 30, 2024. Net cash used in operations was $2,550,384 for the six months ended June 30, 2024. Additionally, as of June 30, 2024, we had an accumulated deficit of $50,255,147 and have generated minimal revenues since inception. As of June 30, 2024, we had working capital of $4,949,028, including cash of $587,518 and short-term investments of $4,661,494. These factors raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. We are seeking to raise capital through additional debt and/or equity financings to fund our operations in the future. Although we have historically raised capital from sales of common shares, there is no assurance that it will be able to continue to do so. If we are unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Current wording

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited consolidated financial statements, we had a net loss of $3,949,373 for the nine months ended September 30, 2024. Net cash used in operations was $3,507,202 for the nine months ended September 30, 2024. Additionally, as of September 30, 2024, we had an accumulated deficit of $51,526,948 and have generated minimal revenues since inception. As of September 30, 2024, we had working capital of $4,226,065, including cash of $632,497 and short-term investments of $3,919,697. These factors raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. We are seeking to raise capital through additional debt and/or equity financings to fund our operations in the future. Although we have historically raised capital from sales of common shares, there is no assurance that it will be able to continue to do so. If we are unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Previous wording

On May 31, 2024, Dragon entered into a Securities Purchase Agreement with an institutional and accredited investor, pursuant to which Dragon agreed to sell an aggregate of 666,660 shares of Dragon’s common stock, par value $0.0001 per share for an aggregate purchase price of $199,998. Following the sale, the Company retains approximately 70.0% ownership of Dragon.

Current wording

On May 31, 2024, Dragon entered into a Securities Purchase Agreement with an institutional and accredited investor, pursuant to which Dragon agreed to sell an aggregate of 666,660 shares of Dragon’s common stock, par value $0.0001 per share for an aggregate purchase price of $199,998. Following the sale, the Company retained approximately 70.0% ownership of Dragon.

Previous wording

Cash Flow Activities for the Three months ended June 30, 2024 and 2023

Current wording

Cash Flow Activities for the Nine Months ended September 30, 2024 and 2023

Previous wording

Net cash used in operating activities totaled $2,550,384 and $3,180,118 for the six months ended June 30, 2024, and 2023, respectively, a decrease of $629,734.

Current wording

Net cash used in operating activities totaled $3,507,202 and $5,159,510 for the nine months ended September 30, 2024, and 2023, respectively, a decrease of $1,652,308.

Previous wording

Net cash flow used in operating activities for the six months ended June 30, 2024 primarily reflected a net loss of $2,765,915 adjusted for the add-back (reduction) of non-cash items consisting of depreciation and amortization of $11,565, amortization of right of use assets of $35,131, accretion of stock-based stock option and common stock expense of $116,698, a non-cash gain from deconsolidation of variable interest entities of $(107), and foreign currency exchange loss of $12,965, offset by changes in operating assets and liabilities primarily consisting of an increase in accounts receivable of $9, a decrease in prepaid expenses of $40,207, an increase in accounts payable and accrued expenses of $38,693, an increase in contract liabilities of $25, and a decrease in operating lease liabilities of $39,637.

Current wording

Net cash flow used in operating activities for the nine months ended September 30, 2024 primarily reflected a net loss of $3,949,373 adjusted for the add-back (reduction) of non-cash items consisting of depreciation and amortization of $17,347, amortization of right of use assets of $54,065, accretion of stock-based stock option and common stock expense of $125,810, a non-cash gain from deconsolidation of variable interest entities of $(107), foreign currency exchange loss of $12,965, and non-cash research and development expense of$166,667, offset by changes in operating assets and liabilities primarily consisting of an increase in prepaid expenses of $59,179, an increase in accounts payable and accrued expenses of 185,469, and a decrease in operating lease liabilities of $60,823.

Previous wording

Net cash flow used in operating activities for the six months ended June 30, 2023 primarily reflected a net loss of $4,686,444 adjusted for the add-back (reduction) of non-cash items consisting of depreciation of $12,941, amortization of right of use assets of $28,782, accretion of stock-based stock option and common stock expense of $1,474,369, a non-cash gain from initial consolidation of variable interest entities of $(42,737), impairment loss on digital assets of $23,381, and net unrealized and realized gain on short-term investments of $78,110, offset by changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of $277, a decrease in accounts receivable – related party of $42,000, a decrease in prepaid expenses of $53,612, an increase in accounts payable and accrued expenses of $23,699, a decrease in contract liabilities of $81, and a decrease in operating lease liabilities of $31,807.

Current wording

Net cash flow used in operating activities for the nine months ended September 30, 2023 primarily reflected a net loss of $7,051,024, adjusted for the add-back (reduction) of non-cash items consisting of depreciation of $20,687, amortization of right of use assets of $44,272, accretion of stock-based stock option and common stock expense of $2,183,835, a non-cash gain from initial consolidation of variable interest entities of $(42,737), impairment loss on digital assets of $23,381, net unrealized loss on short-term investments of $47,672, and non-cash accrued interest included in short-term investments of $239,382, offset by changes in operating assets and liabilities primarily consisting of a decrease in accounts payable – related party of $21,801, an increase in prepaid expenses of $61,456, a decrease in accounts payable and accrued expenses of $14,385, and a decrease in operating lease liabilities of $48,808.

Previous wording

Net cash provided by investing activities amounted to $527,769 and $2,913,281 for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Net cash provided by investing activities amounted to $1,269,566 and $4,496,890 for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

During the six months ended June 30, 2024, we received gross proceeds from the sale of short-term investments of $6,121,770 and purchased short-term investments of $5,594,001.

Current wording

During the nine months ended September 30, 2024, we received gross proceeds from the sale of short-term investments of $9,757,175 and purchased short-term investments of $8,487,609.

Previous wording

During the six months ended June 30, 2023, we received gross proceeds from the sale of short-term investments of $3,845,000 and purchased short-term investments of $964,072. Additionally, we received $64,538 in cash upon initial consolidation of variable interest entities and purchased property and equipment of $32,185.

Current wording

During the nine months ended September 30, 2023, we purchased short-term investments of $5,363,163 and received gross proceeds from the sale of short-term investments of $9,845,000. Additionally, we received $64,538 in cash upon initial consolidation of variable interest entities and purchased property and equipment of $49,485.

Previous wording

Net cash provided by (used in) financing activities totaled approximately $1,656,771 and $(399,284) for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Net cash provided by (used in) financing activities totaled approximately $1,916,771 and $(398,284) for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

During the six months ended June 30, 2024, we received $559,251 from the sale of common stock, net, received $235,998 from the sale of subsidiary common stock, net, and received $861,522 from the sale of pre-funded warrants.

Current wording

During the nine months ended September 30, 2024, we received $559,251 from the sale of common stock, net, received $495,998 from the sale of subsidiary common stock, net, and received $861,522 from the sale of pre-funded warrants.

Previous wording

During the six months ended June 30, 2023, we repaid related party advances of $1,315 and we used cash of $397,969 to purchase treasury stock.

Current wording

During the nine months ended September 30, 2023, we repaid related party advances of $1,315, we used cash of $397,969 to purchase 66,945 treasury stock at an average price of $5.94 per share, and we receive $1,000 from the sale of Series B preferred stock.